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Vietnam’s edtech (educational technology) market has witnessed a significant growth trajectory over the past years. With an annual growth rate of 44.3%, the market was among the top 10 fastest-expanding online education markets globally in 2019. According to IMARC, edtech in Vietnam will likely grow at a CAGR of 13.50% from 2024 to 2032.
The edtech market in Vietnam is constantly evolving. It began with educational games and pre-recorded lessons; however, in recent years, there has been a shift to live classes.
Vietnam currently has varied edtech segments, including Early Childhood Education, School Administration, Language Learning, Learning Management Systems, Broad Online Learning Platforms, Test Preparation, etc. The most popular among these are K-12 and the STEAM/STEM education segment that aims to enhance the technical bent of mind for students.
High internet penetration, focus on education, spur growth.
The primary reason behind the rapid expansion of the edtech market in Vietnam is the high internet and smartphone penetration and improved internet infrastructure. Viettel and VNPT are among the Vietnamese mobile network operators that have been working towards commercially trailing 5G services and expanding internet coverage even to remote hilly regions so that students can access online learning. Besides, prominent Vietnamese software companies are recognising the potential of the edtech sector and are actively developing products to cater to this market.
The emergence of artificial intelligence (AI) is also playing a critical role in transforming edtech in Vietnam to personalise learning experiences for each student.
Moreover, there is an emphasis on education in Vietnamese families, particularly on learning English. The Vietnamese government has also made English compulsory for primary-level students in school. On average, households in Vietnam contribute to nearly 24% of the total cost of schooling. The OECD Program for International Student Assessment (PISA) also revealed that Vietnam’s primary and higher educational levels have showcased high results.
There is also a high emphasis on vocational training in the country, which adds to the edtech boom in Vietnam. According to other OECD data, the Official Development Assistance (ODA) for education and training in Vietnam has stayed relatively stable at $130 mn per year.
Government focus on edtech in Vietnam
Investing in education and training has always been a priority for the Vietnamese government, recognising it as a crucial tool for sustainable economic development.
The estimated recurrent expenditure for the education and training sector in 2022 was VND 275.7 tn as per the Government’s report on education activities. This accounts for nearly 15.45% of the total state budget expenditure.
“The expenditure on education has not reached the rate of 20% set in the Law on Education 2019 but is still higher or on par with some countries such as the United States (13%), Indonesia (17.5%), and Singapore (19.9%),” said Professor Le Anh Vinh, director of the Vietnam Institute of Education Sciences.
In July 2021, the Vietnamese government set a target to achieve 90% online training coverage for universities and 80% for high schools as well as vocational training institutions by 2030. This ambitious target is set with the aim of achieving a high-quality workforce specialising in digital skills and fostering the growth of startups.
FDI likely to grow in Vietnam’s education sector
A report by GetJSC suggests that edtech in Vietnam is one of the top four industries to have witnessed massive investment activity. In 2020 during the pandemic, while most sectors in Vietnam witnessed a decline in FDI, the education sector was the only exception. According to Vietnam’s Ministry of Planning and Investment, FDI in the sector surged 58% over the year to $78.9 mn during the period.
Joshua James of the European Chamber of Commerce in Vietnam told a local Vietnamese newspaper that foreign investment in Vietnam’s education sector would continue to rise as the country’s profile has improved because of its success in managing Covid-19. He added that Vietnam’s growing young population and its immense efforts to achieve high economic growth also make its education market attractive.
Competition, low pace of transition from offline to online mode, pose challenges
Despite growth opportunities, established players in the global tech industry, pose a tough competition to Vietnam. Also, the high level of expansion in the edtech market doesn’t ensure the profitability of the companies. A large user base on these platforms doesn’t automatically translate to a huge paying customer base as the transition from offline to online model still has to pace up in Vietnam.
Hence, edtech in Vietnam needs to design comprehensive strategies to boost its development and navigate these challenges. According to analysts, this could involve introducing revolutionary products catering to the practical needs of users and focusing on establishing sustainable revenue models.
